Estonia now officially worst country in EU for Bitcoin, blockchain tokens and assets

Yesterday the Estonian Supreme Court ruled in my Bitcoin case.

The state and some media claimed that the court decided to treat Bitcoin like any other economic activity, but this is not true.

The court decided to apply extra regulation to Bitcoin trading that does not apply to other economic activities. Including the requirement to meet customers in person (face to face), as well as the requirement keep IDs of ALL customers and report those who trade more than 1,000 Euros more per month. No other economic activity is subject to such strict requirements, the normal reporting limit is 15,000 Euros not 1,000. Estonia is also the only EU country to apply special strict requirements to Bitcoin, most other EU countries, do treat Bitcoin like other economic activities and do not impose extra strict regulation.

This ruling not only applies to Bitcoin, it applies to all blockchain tokens and assets, the only requirement being that the token or asset can be exchanged for fiat currency somewhere.

I think it's safe to say that Estonia has now confirmed that it is the worst country in the EU to start a Bitcoin or blockchain business.

As a bonus, the court also decided that I do not have the right to silence and that I must provide information that could incriminate myself.

So besides being hostile towards Bitcoin, blockchain tokens and assets, Estonia is also not respectful of fundamental basic human rights.

Do you feel btc.ee is not a "provider of services of alternative means of payment" according to the definition?

(4) A provider of services of alternative means of payment is a person who in its economic or professional activities and through a communications, transfer or clearing system buys, sells or mediates funds of monetary value by which financial obligations can be performed or which can be exchanged for an official currency, but who is not a person specified in subsection (1) or a financial institution for the purposes of the Credit Institutions Act.

Since it's definitely not a "currency exchange service" due to the restriction of "official currencies" as stated here:

For the purposes of this Act, a currency exchange service is the exchange of the official currency of one country for the official currency of another country within economic or professional activities of an undertaking.

So doesn't it make sense then that btc.ee should follow this law:

(8) A provider of services of alternative means of payment shall:

identify and verify each customer upon establishment of a business relationship and carrying out a transaction while being present at the same place as the customer, if the value of the transactions of the customer exceeds 1000 euros per calendar month or an equal amount in another currency;

upon mediation of a transaction between several customers, identify and verify each person participating in a transaction.

So do you disagree with the ruling that btc.ee falls under this definition (if that is indeed what the ruling was) or do you find it unfair what the law is saying (i.e. do you wish to change the law), or something else entirely?

But at this point it doesn't matter, all that matters is that they have irrevocably ruled what Bitcoin is in Estonia. The consequences of that are what I posted (and the law quotes you posted confirm that).

And that means that Estonia is the worst country in the EU for Bitcoin, blockchain tokens and assets.

But these restrictions only apply to exchange services. It doesn't apply to paying with bitcoin, does it? In fact, doesn't this confirm that bitcoin is a valid means of payment instead of a "resource" or something else, and isn't that in the best interest of bitcoin? All I'm seeing right now, from this specific court case, is that bitcoin trading services need to do some due diligence according to these rules, but it's not banned nor unfairly taxed?

I have the same observation, but hopefully somebody more unbiased would confirm this.

OP seems to be trying to drum up as much attention as possible to the matter, and it's a hastily written TL;DR above... that doesn't really help that communities get their misinformation from these two-sentence summaries that are logically fallacious.

This is an interesting way of looking at it. Despite the regulation that OP clearly dislikes and that is probably quite disruptive to his business, it seems that the Court's ruling has created a precedent or perhaps defined (I am not familiar with Estonian law, so not sure which) how Bitcoin should be legally treated. By ruling Bitcoin exchange was qualified as "provider of services of alternative means of payment" and thus Bitcoin as "alternative means of payment" which is a legal term in this context.

I think OP is misleading when saying that the normal reporting limit is 15,000 Euros not 1,000. It is technically true but that limit applies to financial institutions which I would guess OP really does not want to be as these seem to be covered in Credit Institutions Act and have even worse set of regulations applied to them that make lower reporting limit seem simple by comparison.

I'd say it's unfairly restricted. In the OP I explained the special restrictions they now apply to Bitcoin - some comments even quote the laws where that's written (so you don't have to take my word for it). I didn't use the word "banned", I countered the claim that it's being treated "just like any other economic activity", when it is clearly not.

While my case was about exchanging, the law as I read it suggests that whenever more than 1,000 Euros worth of Bitcoin is "mediated" in a month these restrictions apply. So in theory it should also apply when buying something for bitcoin other than Euros, for instance expensive jewelry.

If in doubt, you can write the appropriate ministry or agency in Estonia and file a request for information (teabnõue in Estonian) and ask them this question. Tell them I sent you ;-)

And New York State, which is probably large enough to be a country in and of itself. They didn't ban it, just made it so difficult to get a license that only the rich can play ball.

Also not all that different from MSB licensing in the rest of the US, where you have to spend millions to license in nearly every state individually, each with their own special sets of rules and requirements.

What motherfuckers? You mean the same party that people are voting for? They certainly haven't been in power alone and it's not like there is any valuable alternative for the REF-IRL-SDE coalition right now. The Center Party is a Putinist outcast, EKRE are right-wing populist pseudo-fascists and the Free Party is free of any ideas to offer and will to actually govern...

That's also what I thought until about 2 years ago, unfortunately I acted on that belief and you can see the result today.

The problem in Estonia is that they hype up the e-whatever thing of the moment, but no-one outside of Estonia really knows the country, and with no-one taking them down a notch they get to project this idyllic version of what Estonia is.

"(1) A communications undertaking must grant a surveillance agency or security authority access to the communications network for the conduct of surveillance activities or for the restriction of the right to confidentiality of messages, correspondingly."﻿

There's also the requirement for every company to report each invoice or bill over 1,000 Euros to the tax office separately.

Estonia likes to portray itself as a forward looking "e-country", yet when the first truly disruptive innovation comes along, they do everything they can to stop it. (Besides my case, they also imposed VAT on the whole value of Bitcoin trades and then argued for this policy to be applied EU wide - which thankfully failed.)

The court simply ruled that bitcoin is a currency alternative method of payment, which makes OP's business subject to all the regulations concerning financial transactions. Keep in mind that the court also recommended the legislature to make it a priority to start developing laws that take cryptocurrencies into account.

It did not rule that it's a currency, but an alternative method of payment. It ruled that the extra tight regulations that the state wants to impose on Bitcoin can be applied. Regulations that are NOT applied on other currencies.

It's btw interesting that in the VAT case before the ECJ Estonia argued that it was not a currency.

I have no idea how this relates to a virtual currency which has no overseeing central bank and which can pretty much be used for crime without leaving a trace. Financing needs to be transparent and checked, that's definitely also what Estonia aims for.

You can't fight technology. If something is more efficient then it will be adopted in the long run regardless of what governments or individuals do to try to stop it. Best thing they could to is to build the tools to regulate it as best they can.

This keeps happening over and over again in the history of the human race. Each time some new technology comes along that massively disrupts things entrenched interests try to fight it. And they couch their opposition to the tech in dogmatic terms. They will never come out and say that they oppose it because it hurts their self-interests. Regardless, they always fail in the long run because the bottom line is that if some technology makes labour more productive people will use it.

Oh and BTW all bitcoin transactions are public so LOL "at cannot be traced"! See for yourself:

And that's exactly what the Estonian high court's decision did, specifically clearly positioned bitcoin in the legal framework. In addition, it clearly pointed the finger at the legislature and recommended writing extra flexibility for cryptocurrencies into the laws.

Each time some new technology comes along that massively disrupts things entrenched interests try to fight it

Yet in the case of Estonia, the government and legislature have clearly understood that fighting the tide isn't sensible and flexibility and early adoption result in success. A good case in point from the current year: both the government and the Tax Board have embraced Uber and other ride-sharing services and are accommodating these services into the laws and tax code. Not only that, the Tax Board is developing innovative technical solutions to allow paying all applicable taxes on the fly without any bureaucracy whatsoever. Contrast this with many other European nations where there have been riots on the streets against Uber and governments have clamped down in response.

I don't understand the dramatic tone in this thread. The court didn't rule that cryptocurrencies are banned or subject to excessive, undue regulation; but that cryptocurrencies are subject to the same regulation as other "alternative means of payment" (a very clearly defined term in the Money Laundering Law). And if the pattern holds, I'm cautiously optimistic that the legislature will begin developing additions to the law that will take the nature and properties of cryptocurrencies into account.

Yet in the case of Estonia, the government and legislature have clearly understood that fighting the tide isn't sensible and flexibility and early adoption result in success.

No they haven't. The state's first reflexive reaction to Bitcoin was to try to hamper it as much as possible. Find some people to make an example of and impose VAT on the whole value of a Bitcoin.

The court didn't rule that cryptocurrencies are banned or subject to excessive, undue regulation

Yes it did, the regulation is excessive and also totally over the top for the stated objective (AML). It's clearly regulation aimed at hindering and hampering the development of Bitcoin, it discriminates against Bitcoin and other alternative means of payments vis a vis traditional currencies - all while claiming these things are similar in their function.

In my view these regulations violate EU AML law and other EU principles on several counts. We will be filing a complaint against Estonia at the European Commission - I will publish that when it happens (probably quite soon).

It's also interesting to note that there was no VAT on alternative means of payment until Bitcoin came along and they reinterpreted VAT regulation to the detriment of Bitcoin.

Turns out the guy in charge of this operation was really abrasive to officials and they came down on him. We have found Estonian authorities to be very helpful and polite and so have many others

Paxful moved to Estonia 7 months ago after the BitLicense and we can say that this is an isolated case and that Estonia is a great place for bitcoin companies and startups in general! We have grown our team to seven and found some truly amazing talent and support. Estonia is one of the best places for startups because the cost of living is low, internet is awesome, startup community is thriving and developers abound for half the price. There are also some big bitcoin operations here. Paxful is just one of them.

Go easy on Estonia guys, this isn't the whole story... and stay tuned for our affiliate program it will pay out 1000% more than anything else!

ps. girls are super cute, air is fresh, nature is the best in europe and alot more!

As a bonus, the court also decided that I do not have the right to silence and that I must provide information that could incriminate myself.

According to the NC's decision, you were asked to provide certain information. Instead of declining to provide it (citing self-incrimination), you challenged the right to ask that information. Your lawyer made a mistake here.

There's an important difference between finding a certain administrative procedure to be legally unfounded, and declining to fulfill it. They had the right to ask the information, and you had the right to decline giving it out.

I also need to point out that I actually declined to answer. If you didn't want to answer the request, the law required that I turn to the court to explain why I didn't want to answer or else I'd get a fine. So I turned to the courts, and this was one of the reasons I advanced for not wanting to answer it.

Actually the court copied the ruling from the Appeals court on this, which was much more explicit that I don't have this right. The Supreme Court did not correct the Appeals Court on this point, simply repeated part of the Appeals court conclusion.

As I explained I declined to answer and was told that if I do not want to answer I have to turn to the courts and argue why. And that I did.

We argued many things, incl. my right to silence, and also that the request was not valid, etc, etc.... these are not mutually exclusive things. Part of the case was to determine which law applies to Bitcoin.

But it's interesting, and I may test your theory, as now I have to answer their request I could write as an answer that I decline to answer.... I'll discuss this with my lawyer tomorrow.

The way I read it 24 says the police can ask (ok fine), and 6.7 says I cannot use that right to not answer because the risk is "distant" and "hypothetical" (in their words). And as I said, the Appeals court was much more explicit (see below) in denying me this right.

Also I don't know how not answering the request can be construed as if I did not decline to answer.

I´ve read the judgement and see your issues with it in economic sense. You corretly pointed out the issues with categorising it as alternative payment method. Changes in alternative payment legislation made 2010 that limit its use harshly and minimises its economic use currently. Aged viewpoint by lawmaker which was a rash move to counter new cryptocurrencies possible effect to economy.

As for the courts part. Courts job is to decide your case based on existing legal system. If there isn´t a real legal gap then courts jobs is to fit your case into current law. Since the old regulations exists in which cryptocurrencies fit in there can be no new law created by court. Even though the regulation was not initially created for cryptocurrencies in mind. Even the court itself points out the need for more specialised laws for cryptcurrencies.

Right to silence is an odd argument. Especially if we are talking about money-laundering anti-terrorism laws. It is nice to talk about anarchy and total anonymity but this in case of money laundering and terrorism is not to be tolerated. If you did launder terrorists or criminal money you should face the proper punishment. Incriminating yourself or not.

I understand your frustration but you go way overboard here. Estonian state court has no malice towards Bitcoin, cryptocurrencies or you. Suggesting human rights abuse is more a legal strategy and than a real issue here. Besides you obviously are not imparcial party to judge Estonia to be the worst or not the worst. You had economic intrest in this court ruling.

Instead of complaining on Reddit you should start lobbying for law changes with other cryptocurrency people in Estonia. I doubt you would meet much resistance from any part of the government. The initial fears people had for cryptocurrencies have faded. Just because Estonia considers itself innovative in the field of IT doesn´t neccesarly mean its legal system can keep up with rapid IT development on every step. Cryptocurrency cases in small country are few thus changing legislation has been slow.

This is by far the best answer in this thread. I am not familiar with the specifics of Estonian law or government (though the country seems lovely and I'd love to spend a few years there) but based on my knowledge of various legal systems - it sounds like the court did the right thing here.

Courts aren't designed to make law, only interpret specific cases in the context of established doctrines and statutes. Here, there was a legitimate difference of opinion over the interpretation of a statutes applicability and the court did the least invasive thing possible. From what I read briefly, the Court acknowledged that a legislative change would resolve the issue and categorize cryptocurriencies differently.

OP- I'm sorry you lost your case. That sucks but it happens sometimes. Part of doing business anywhere in the world. I don't think you have a human rights violation here but what do you have to lose by trying right? It also sounds like your lawyer sucked - being good is why they make lots of money. The upside is that you can work to change the laws and this happened before a criminal lawsuit with multimillion dollar penalties lawsuit hit you hard and stuck you in jail. It isn't much of an upside but thems the breaks.

The police is seeking information from me, not to fight terrorism, but to determine if they can charge me. They've said so much and charged another trader for trading 2,000 Euros. This is a basic right to silence situation, I do not have to testify against myself, it even says so in the Estonian constitution. In paragraph 22 I believe. The constitution does not list any exception to the rule.

It's probably the best thing to complain on Reddit. This is exactly the kind of publicity that can get the government of Estonia to change it's attitude.

Two years ago when this started I was one of the founding members of the Estonian Cryptocurrency Foundation. The head of the foundation spent countless hours lobbying for a change in the law.

The Estonian government has done nothing in all that time, they chose to let it come this ruling by the Supreme Court, in other words they chose to let this bad publicity happen by doing nothing for more than 2 years.

I'll also note that over these 2 years, Estonia (alone) argued strongly to the ECJ to impose VAT on the entire value of a Bitcoin trade - the other two countries argued for VAT on the service fee only. Had Estonia gotten it's way Bitcoin would have been severely hampered in the entire EU. Thankfully the ECJ is not a rubber stamp court for the Estonian government and it ruled against the position of Estonia.

The Estonian state has over the last two years systematically done everything it could to hamper Bitcoin, and by extension blockchain tokens and assets.

The only thing that can change things now, is a bit of bad publicity for the government.

Aah, right to not testify againts yourself. That is what you were refering to with right to silence. You are thereby assuming you have commited a misdemeanor or a crime by estonian law ?

From case files it appears that police moneylaundering bureu (RAB) requested acess to check whether anti-terrorism anti-moneylaundering law (RahaPTS) was being followed and whether your company is part of their enforcement area. That is determined by whether you are a financial institution. You may call it a hobby but at the end of the day you are doing similar things to banks (better explained in the court case). So why is governmental agency supervision over this kind of economic activity denied? Your claim is that this kind of activity is not regulated at all but it is clear to any reader that is falls under alternative payment regulation as it currently exists. By claiming not to do similar things to financial institutions you are just attempting to avoid any regulation.

Has this traders case been in courts? If so please refrence it or a detail I can look it up by.

Reddit is the wrong place for govermental attention. Hoping critical mass of people in the field get your point and thus weaken economic activity in the country will matter little if the specific activity is scarce in the first place. You need to work with investigative shows of the country or major newspapers if you want to deal with media. Spark discussions. Postive motions for change. Its neccesity is now questionable though. Lobbying harder after supreme courts suggestion for law changes should get you there without this media thing.

Gears of democratic government work slow. 2 years is a short time in lobbying sense. If there is a case in courts, waiting for supreme court decision, is not out of common practice for any country. Supreme court has now made a decision and suggested more specialised laws. It is highly likely lawmaker will start its slow progress in changing these laws.

VAT on Bitcoin is a policy decision. I understand it is seen as a big evil which just cuts into profits but that is how tax is. Also Estonia might´ve been the only for full value but seemingly Germany supported partial taxation. So not really Estonia vs world as you make it out to be. I don´t really care about this point since its as mentioned, question of policy. If you choose to consider this as a sign of bad intent you are free to.

By saying Estonia has systematically done everything it could to hamper Bitcoin. You need to give specific examples. You cannot just say it and claim it be nothing but the truth.

You don't need to be guilty to use your right of silence, even getting charged doesn't mean you're guilty. Learn a thing or two before making wild statements.

You clearly don't know anything about the claim I made or what I was attempting to do, unfortunately I don't have the time to explain the intricate details to every Reddit commentor. Especially not to people whose main purpose seems to be to have an argument.

Fortunately I don't work for you, so you can use google to search for the story of the other victim yourself. There are even references in the court documents my lawyer filed - I've posted them all.

Also I'll decide myself where I post about my case, thank you very much. I know Estonia much better than you do and what they are sensitive to, and it's not what you suggest.

Estonia is supposed to be a small dynamic country, fixing this stupid law could have been done in the last two years, they've changed other things much faster, they chose not to do anything about this. Now they reap the consequences of their willful inaction.

There is quite a difference between VAT on the whole value of a financial asset or just the service fee. So yeah it was Estonia being extremely unreasonable vs the rest of the EU being reasonable.

I gave specific examples. You are even discussing them, so let's not pretend I didn't give any examples please.

No you don´t need to be guilty but paragraph 22 applies to criminal law not administrative or civil law. As in criminal investigation. Thus the question. Saying you don´t have to provide information to government at all is absurd. It is similar to saying that you don´t have to provide tax form because they might convict you in tax fraud and then complaining that tax office is to blame in punishing you for not submitting tax form.

I know about the claim what public court documents tell me. If you have some verified evidence that shows your side in better light why hide time or not discuss them openly?

You were refrencing the story. I did not ask you to print it and mail it. Just point out the detail that lets me identify it correctly. I don´t find that an unreasonable request.

It is very much your right to choose how to go about this thing. As I understand reddit is for discussion so me making suggestions has no consequenses or power over your action or inaction. If you know Estonia better than great and feel free to ignore these points.

Financial importance of VAT on Bitcoin I will leave it to you. I was pointing out a gap in your statement.

You are the one claiming Estonia is the worst country in EU for Bitcoin. Burden of proof is on you for this. You are the one who has to make a case for it being the worst country in EU. Currently it comes across more like you are lashing out in emotional anger over broken business. I want be able to decide whether your point is true but for that one needs good quality evidence. Leaping to rash conclusion would be a mistake.

You file a tax form in order to determine how much tax you have to pay. The questions I was asked are for the purpose to determine if they can charge me. Totally different purpose. BTW, par 22 doesn't list any exceptions to the privilege against self-incrimination.

No country in the EU has more restrictive rules that apply to Bitcoin, blockchain tokens and assets. Some outside the EU do, but not in the EU. It's a verifiable claim, and if you think it's not true, it's simple you can supply evidence of another EU country with more restrictive rules. I haven't seen anyone do that, most likely because they can't.

Back when Bitcoin was around $1000 he took alot of hassle for suggesting a more likely price was around $300. I wasn't one giving him hassle but I didn't believe and I was proved wrong. I'm much wiser and more cautious of price bubbles now !

LHV recently hired the cop responsible for starting Estonia's anti-Bitcoin policies... he's a very rigid bureaucrat who applies rules as narrowly as possible. This doesn't bode well considering he's leading their AML department.

Sorry, I was not clear, I meant not the rules, but type of businesses that should follow these strict regulations. Court can not come up with strict regulations themselves and apply it to you only, they should be described in laws for somebody to follow them already. They just apply this same regulation to you, that is what you don't agree.

So who are the entities that should follow these strict regulation apart from bitcoin traders.

Until now this law has only been applied to me. Something else I find particularly unfair. Maybe they'll now expand to tackle other people?

What entities exactly it applies to? I tried to find that out and never got a clear answer. From the Supreme Court ruling I gather anyone who sells bitcoins for a higher price than he/she buys them for, so I guess anyone who has a listing on Localbitcoins is now fair game.

The court decided that trading in bitcoins is a type of economic activity that is subject to money laundering laws, since bitcoin has the properties of a currency. All banks and other businesses providing credit are subject to these laws, AFAIK. Possibly currency exchanges etc. This is the law that mostly applies to this case.

trading in bitcoins is a type of economic activity that is subject to money laundering laws

But could you give your thoughts why it should be otherwise? I mean in the U.S. it is normal that bitcoin ATM operator for example has AML/KYC compliance policy developed and follow those monitoring rules. I mean you can disagree with this, but for me it makes sense that somebody who trades bitcoins professionally should obey these laws.

I had a quick look at the link you provided and looks to be the company falls under § 3 (1) 5):

traders for the purposes of the Trading Act, if a cash payment of more than 15 000 euros or an equal amount in another currency is made to the trader, regardless of whether the financial obligation is performed in the transaction in a single payment or in several linked payments, unless otherwise provided by law;

So the court assessed it differently then. What is the category the court put the company? 2) financial institutions?

I mean even if they assign 15000 limit to obey - it is still required to do due diligence even for smaller amounts, as they combined can lead to 15000, right?

Also regarding other European countries, it is really different everywhere, in Germany for example you can't run a bitcoin ATM unless you have some bank level similar licence from BaFin, that is why there are no bitcoin machines in Germany basically. So it is strict in other countries as well.

The good thing you still can do the business, it is just stricter conditions, but not forbidding it.

Funny that, I am irked that they picked me to make an example off and test the law on (costing me nearly 10k Euro), that they threatened me with 3 years in prison and now deny me my right to not incriminate myself.

I am also upset that I used to love the country and was fooled into believing the Estonian e-hype. I feel cheated and lied to.

"Test" the law? The law was there, black on white. Even if there was no precedent for cryptocurrencies, it was your obligation to follow the law. You failed to do that and are now fiercely bitter against the Estonian state as a whole. That's what it seems like from where I'm standing.

There is this thing called disagreement about the interpretation of the law - and that's tested in courts. So for instance the EU requires that a member state justify any extension of AML law and register that extension with the EC, and it's written black on white as you say. Estonia however failed to do these things, Estonia broke the law, yet the Supreme Court does not hold the state accountable for this failure.

Yes nice answer. But you choose to TRADE BTC not to live on BTC.What will happen if all Estonians (or majority) will demand to be paid in BTC from their jobs? The gov will put them all in jail? That will never happen and gov will never stop you to use (not trade) BTC, because they can't stop you to use it.I think many people start in a wrong way with Bitcoin. Many consider BTC a currency (that is designed to speculate) and not MONEY (that is designed to trade for goods and services). If we start using it like simple money NOBODY can stop you.I know is a hard process, but everything have a start.

If we are going to play the what-if game, what-if we had 10 times the current number of transactions of people using bitcoin as money? The system as it is would become prohibitively expensive. It's hard to say BTC is ready for the limelight.

You're right. It isn't a currency. I want to refine money though. Bitcoin is a payment method. Just like ETF, just like a credit card, just like cash. It isn't money in the sense that it has inherent value or is backed up by the threat of legal force, it's money in that it's a way to settle debts using a low-cost lowest common denominator as an intermediary store of value (and in a broader sense record ownership over the value).

What happened to the call for "free data flow" by the Estonian President at his EU address earlier this year?? He even mentioned blockchains.

Europe must invest in the underlying technologies that create confidence in the security of data flows, especially encryption and block-chain technology, which really would give us genuine security, and we must promote their use.

Estonia is really into effective control over finances of its citizens , you cannot for example receive payment for work anywhere but a bank account opened in your name. Getting any intentional monetary transfers requires to fill a lot of detail.

you cannot for example receive payment for work anywhere but a bank account opened in your name

That is not true!

You can get your salary in cash if you wish. If your accountants tell you otherwise then the most probable reason is that they are lazy - making cash payments is quite the hassle (especially if your company doesn't deal with cash on a regular basis and your accountant has to actually go to the bank to fetch your salary for you every month :) )

Source: I'm an employer in Estonia.

Getting any intentional monetary transfers requires to fill a lot of detail.

What details would that be that's not required in other EU countries but is required in Estonia? I've sent and received money abroad and I don't recall anything that I would consider "a lot of details" :/

I certainly feel misled by Estonia. Of course they like the government's own technology, they are just not really open towards disruptive innovation from the outside. A kind of "not invented here" syndrome.

When somebody mentions Kazaa, the reaction is usually "oh my god that horrible pile of shit". But the P2P engine powering the network was developed in Estonia and it was really pretty innovative for the time. I believe that the same engine, or a modification thereof, also became the basis of Skype (which also heavily relies on a distributed architecture).

they are just not really open towards disruptive innovation from the outside

Not really. Estonia has very quickly embraced Uber and other ride-sharing innovations, for example, and is actively changing its laws and tax procedures to accommodate that. Of course, I understand that you're bitter about your business being subjected to the same rules as any other businesses committing financial transactions, but that was to be expected. Or are you arguing that cryptocurrency is not in fact a currency?

Any new systems, economic, technological, or otherwise, that come in to the system already in place, have to be weighed down with Federal Regulation. They want to keep those old war horse power houses around. Fascism over Democracy.

This is a gray area. Until now sites in other countries have not been targeted. But the law doesn't specifically state what is considered as "doing business in Estonia". Does it apply to serving Estonian customers from outside of Estonia?. I've tried to find out but never got a clear answer, other than, we see from case to case.

if you are forced to give out all that information why are scared? all you did was facilitate bitcoin trading of a few thousand Euros which is something they know already. Isn't that enough for them to incriminate you?

The police is seeking information from me, to determine if they can charge me. They've said so much in an e-mail to me and charged another trader for trading 2,000 Euros. In my view this makes it a right to silence situation.

Furthermore I believe in fundamental rights and I believe they are worth fighting for, if we don't, our rights are going to be trampled upon (they already are).

looks like they were very adamant from the start that they wouldn't allow bitcoin to work in Estonia.

I hope you are able to use the fact that other people traded on localbitcoins as well to your defense.

I am Indian and it has been 3-4 years since the Indian government has known about bitcoin and hasn't actively done anything about it (apart from issue a "warning" to people that trading bitcoins is risky and can put them into legal risks as well). But there are openly disclosed exchanges traded thousands of bitcoins every month. They have all been scrutinized, but they haven't been shut down. The adoption is rising day by day. Do you think this is a good sign? Do you think the government can still back lash and charge the thousands of people who have been trading bitcoin? Just asking for your opinion since you have a lot of legal context in another country. I won't (and can't) cite or quote you on anything.

I used that fact in court to show that the law is being applied arbitrarily. IMHO laws should either be applied to everyone or to no-one. But apparently that's not an issue in Estonia, police can just apply the law selectively when then feel like it - maybe this creates some "income opportunities" somewhere, who knows?

Nice to hear that about India, I would say that's a good sign. India is a country that could benefit tremendously from Bitcoin, which can greatly facilitate and reduce the costs of remittance. I hope Indian government agencies are wise enough to see the benefits and not blindly focus on the risks as Estonian government agencies do.

but Indian government has been focusing on risks mostly too. India is a pretty strong democracy, so any arbitrary laws need backing and can be opposed to a fair extent. I think the greatest fear is that people can store bitcoins as black money (black money stored in Swiss banks is a common problem in India). anyway, there is no telling how they might react. I am really surprised they are trying to "set an example" with you.

btw, I am sorry for your predicament. I hope you are the strong kind who will fight this with sheer pride. Otherwise, it's ok, mistakes happen, don't go back too much and regret it.

Basically the Indian government expresses the usual concerns but doesn't act to try to hamper it, at least not at this time. As time goes by it's going to get more and more difficult to stop Bitcoin, so every day that nothing happens is a good sign.

I try. But my wife is from Estonia so she has family there. My children have their grand parents and some aunts and uncles in Estonia. So I might go in summer with them, depending on how I feel. But yeah, I'd rather stay away and go on vacation somewhere else.

African here; keep living that pipe dream, man, Africans love technology but they are perfectly happy with cash as their preferred tax evasion vehicle. Even M-pesa completely tanked in South Africa, despite having a boatload of marketing thrown at it.

Good. Let the state try to fight against the Honey Badger, it only makes the Badger stronger. On some level I wish all governments would just go ahead and ban bitcoin completely and make owning a private key a criminal offense.

In the end their efforts are certain to fail, and if they weren't and the state could actually stop Bitcoin's growth then it would be worthless anyway.

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